News

Business registry proposed in Palo Alto

Council members seek more data about local jobs

Palo Alto is famous for its love of data and wealth of jobs. But when it comes to data about jobs, city officials often find themselves scratching their heads and grasping for answers.

Unlike most cities, Palo Alto does not have a business registry or business licenses, a factor that forces officials to offer estimates and educated guesses. Now, four members of the City Council are looking to change that.

In a memo, council members Karen Holman, Larry Klein, Marc Berman and Pat Burt, urge that the city create a business registry as soon as possible. The registry, they say, is needed to "answer such basic questions as how many people work in Palo Alto and for what types of businesses."

"Impacts of commercial development and activity, such as traffic and parking impacts, are at the forefront of community concerns," the memo states. "The City Council made addressing these issues a council priority in 2013 and again in 2014. However, the City lacks adequate, reliable, and updated data to analyze the issues, structure best policies or programs and to measure their effects."

The council members propose that staff return no later than the end of March with a proposal for an online registry, fees limited to cost recovery, a "simplified, low-cost questionnaire" for very small businesses (home-based businesses would be exempted); and questions that are "designed to obtain information on the number of employees, types of businesses and other information that would be valuable for effective planning purposes."

Though the council members' proposal was sparked by the city's ambitious traffic and parking initiatives, the city's push for a business registry is far from new. In 2009, the council asked voters to approve a business-license tax based on gross receipts. The goals of the proposal were to both raise money at a time of plummeting revenues and to gather information about local businesses. That plan fizzled in November, when 57 percent of voters shot down Measure A.

This time around, the goal is limited to getting information. In the memo, council members note that Palo Alto is "one of the few cities in the region without a business registry or a business license."

"Most cities rely on these tools for obtaining and analyzing critical information about the characteristics of businesses in their communities such as informing zoning decisions and public safety planning and service response."

Posted by Wayne Martin
a resident of Fairmeadow
on Feb 20, 2014 at 10:34 am

The City runs the monopolistic Utility--which classifies accounts as residential, and commercial. So--the City already knows the location, the name, the owner (at least a bill-to party) and the volume of gas, water and electricity consumed at these locations.

There are any number of information services that will sell data to the City about the nature of the business being operated under a given name and location.

And then there is the so-called BID--Business Improvement District that forces people to identify themselves, and pay a fee based on business size. While the BID is limited to the downtown area, so is a goodly percentage of the business--and virtually all of the parking problems.

The Chamber of Commerce also has a fairly large client-base, so why can't they be expected to help out by donating their directory to the City?

Something is wrong with a City Council that has all of this data at its disposal, and ignores all of it.

Posted by 35 year resident
a resident of Old Palo Alto
on Feb 20, 2014 at 11:02 am

Wayne is absolutely right. Our council is looking to take money from businesses to most likely hire a consultant at an exorbitant contract fee to do exactly what with the information? As Wayne accurately stated, all this information is already available. But that isn't the Palo Alto way. Needless spending is how this council rolls.

Posted by Neilson Buchanan
a resident of Downtown North
on Feb 20, 2014 at 11:40 am

These councilpersons are 100% on target asking for a solid foundation to address quality of life for downtown merchants, employees, property owners and adjacent neighborhoods. A simple, inexpensive, systematic data capture system (privacy protected) will result in quality solutions. Three proven experts recently testified to the City Council and demonstrated how solutions can evolve for our two commercial cores during the next few years. If the Council fails to implement a world class, complete, refreshing database, it will be a disgrace to our city and Silicon Valley. Who want Garbage In and Garbage Out in 2014?

Posted by Mark
a resident of Another Palo Alto neighborhood
on Feb 20, 2014 at 12:22 pm

The business registry is important, neighboring cities have such a registry and charge a reasonable tax from each business. The last time this went on the ballot, the city wanted to make it another cash cow and wanted to charge a tax double what neighboring cities charge. I do not understand why items like this which have been addressed by neighboring cities become an issue in Palo Alto.

I work for a contractor who does business in dozens of Bay Area cities. We are required to purchase a business license to do construction work in every one of these cities except Palo Alto. And our office is not located in any of those cities where we pay the license fees. I've never understood why Palo Alto doesn't have businesses foot some of the bills with a modest license fee like all of our neighbors.

Posted by Marie
a resident of Downtown North
on Feb 20, 2014 at 12:56 pm

For the most part, it is a vehicle for the city to collect money now and in the future from businesses. The collection of data is an added bonus. As a business owner, I'm not against it as long as it is not excessive. It is very unsettling not knowing who is in charge of the businesses nearby nor what their core business is supposed to be. This is a good way to clarify things for everyone, as long as the information then becomes available to the public.

Posted by Marie
a resident of Downtown North
on Feb 20, 2014 at 1:00 pm

I should add that this should also be a vehicle for the city to require anyone doing AirBnB to register as a business. This should be the minimum requirement for that activity. In other parts of the world, these are required to submit copies of passports and licenses of the people staying at private homes to the city. I certain no one will like that, but the listing or taxation should be the minimum requirement.

Posted by Andreas Ramos
a resident of Ventura
on Feb 20, 2014 at 1:59 pm

I've started several companies and I've worked in many startups (and I've live in Palo Alto nearly 20 years). I've often heard that Palo Alto has 50,000 residents and 30,000 companies. (Libertarians just love to hear this.)

Only two (yes, 2) cities in California do not require a business license. One is Palo Alto. That's one of the really nice things about Palo Alto. A business license in San Jose is $150/year.

Yes, many of these are "two teens in a garage". Some of those go on to become billion-dollar companies. HP started in a garage. Yahoo started in a Stanford dorm room. Facebook was in a house in Barron Park. And so on.

What's the point of a license? More revenue for the city? Or to collect data? Palo Alto doesn't need a license to collect data. If they want to know about businesses around Calif. Ave., just hire a few student and go door-to-door.

But the vast majority of these small companies are in garages and the spare bedroom. These are the thousands of early-stage startups, software engineers, website developers, etc. A license brings no benefit to them (and a minor paperwork annoyance). They're not going to move to Calif Ave offices. There is no parking issue because they work out of their houses and apartments.

The idea of a city business licence is not relevant anymore. A business is located in a city? Really? Here's a typical six-person team: One in Palo Alto, the second in SF, the third in Austin, two in Bangalore, and another in Helsinki. Where is the business located? Where is their "principal place of business"? Where the servers are? Servers used to be in San Jose or Los Angeles. But these are distributed clouds now, which means they can be in seven different time zones. As Joan Didion said, there is no there there.

This will start as a small fee for the first couple of years and then grow into a full-fledged tax. Businesses in Palo Alto are fools if they trust the city to keep the fee for this registry low. The city doesn't keep its promises.

Posted by Tom DuBois
a resident of Midtown
on Feb 20, 2014 at 4:07 pmTom DuBois is a registered user.

I strongly support a registry as a means for us to understand how many people are working in Palo Alto and what modes of transportation they are using to get here. There are just too many assumptions being made in our current planning processes - we need a register to gather this data.

The registry should be done in such as way that companies report how many employees they have and then must encourage the employees themselves to complete a survey on transportation. That way it will be very diffcult to game the system and we can keep enforcement costs low.

Posted by Eric F
a resident of Downtown North
on Feb 20, 2014 at 4:10 pm

As Neilson and Tom have said, the City Council is doing the right thing by pushing for a business registry. Nobody actually knows how many people work in the Downtown core, or how fast the number changes -- you can't get that data from a water bill. Yet if you're trying to plan for density issues like traffic mitigation and parking capacity, these are pretty important pieces of information to have. It's about time, too; City Hall has taken far too long to start taking a "system" view of these things, vs considering every project in isolation. We lag other cities in getting serious about this stuff.

A business registry is not the same as a business tax. You may argue that having a registry makes it easier to come back some day and impose a tax, and in the most mechanical sense that's true. But they're still separate issues, and separate decisions.

Posted by okie dokie
a resident of Old Palo Alto
on Feb 20, 2014 at 4:16 pm

Maybe those posting comments should actually read the article regarding how the city wants to only obtain information on small business's. Business licenses or as Palo Alto quaintly suggests "business registry" would be limited. So how is obtaining information on certain business's going to help city officials plan for the future? One of those posting even wonders why construction contractors aren't charged for business license fees, they do, it's called a construction permit. The whole idea is another convoluted tax attempt so the city manager can hire more of his unemployed friends. Cost recovery would amount to hiring more six digit salaried managers with a staff of many. The cost recovery would amount to hundreds of thousand of dollars. The city currently has a financed Use and Occupancy business permit program to track every business in Palo Alto, yet I have never heard any city councilmember request or utilize information obtained from the U & O permit program in their numerous studies. What a pity!

Posted by An Insider, from outside City Hall
a resident of Evergreen Park
on Feb 21, 2014 at 11:29 am

In 2009, City Staff had 3 recent lists available to them, each comprehensive of the California Avenue business corridor, including contacts for condo and homeowner resident associations. Yet, the city failed to notify these stakeholders when they clear-cut three blocks of city trees, at the start of the California Avenue Streetscape Project.

This is a TAX. In other cities with business license registration, it may also be a tax, disguised as a registry, OR perhaps their City Hall just did not have the volumes of data available to them when they implemented the fee, as does Palo Alto.

Wayne Martin is correct. PA City Hall likes paperwork. This new project will create revenue, evolving into what "Anony" from Barron Park wrote:

"This will start as a small fee for the first couple of years and then grow into a full-fledged tax. Businesses in Palo Alto are fools if they trust the city to keep the fee for this registry low. The city doesn't keep its promises."

Posted by SteveU
a resident of Barron Park
on Feb 21, 2014 at 11:32 amSteveU is a registered user.

Neal
Limited to Cost recovery? The city has proven to be the most expensive way to administer anything.

What service does the Taxing city provide for a Licensed business? More regulation.
What is the difference between a Tele-commuter and a 'Consultant' working from home? The TAX.
Why is a contractor performing work in a city hit with a double fee? Yes double, A business tax and the PERMIT fee.

All this is just greed by city employees to justify their jobs.
Demand true services for these fees.

Posted by resident 1
a resident of Adobe-Meadow
on Feb 22, 2014 at 10:19 am

I think the registry should include available space for lease in the city - size and available parking. There is available buildings for lease on East Bayshore area that have good parking. These building are continually empty.
Cornish and Carey - others that have commercial property available - put up what you have. Since these building are always empty then assume the lease prices and whatever city taxes are prohibitive to doing business in PA.
The city needs to fix this problem - we are not that special.
I know that the people that built the shopping center on Charleston made sure that their buildings were not on the PA city property - only the parking lots. Also Costco - move just on the other side of the line. What is that telling you?

Posted by Wayne Martin
a resident of Fairmeadow
on Feb 22, 2014 at 11:59 am

> Palo Alto needs a business registry ..

Why? What exactly would the City do with the data in this registry that it cannot get by consolidating the data that it already hasassessors assessment data, tax collection data, BID data, Chamber of Commerce directory, PA Utility customer data, Fire Department Data and data from commercial sources?

Has anyone at 250 Hamilton ever shown any interest in actually using this data to make meaningful decisions? It's hard to find any evidence that anyone in the Planning Dept. has made the claim that they can't do their jobs without having a business registry. Certainly the decisions to give downtown developers a break by allowing for underparking would have been madewith, or without, this additional data, had it been available in the past.

Let's take the use of the parking garages, as an example. The City could have "wired" them by now, so that they could give (effectively) a minute-by-minute utilization of these structures. Yet, there seems to be no evidence of their wanting this datasince they have not "wired" these structures. Or what about parking in the neighborhoods around the downtown area. They could have come up with some video technology that would allow them to determine the parking demand in these areas. Yet, nothing.

And the same goes for traffic in the downtown area. Inexpensive microwave, or video, technologies exist that would allow for a minute-by-minute use of the main streets downtownallowing for very specific LOS calculations, as well as other demand/capacity determinations to be made. Againnothing to date.

Sowhat exactly does the City Council claim they will be able to do if they had this information tomorrow? Will they be so bold as to restrict the number of businesses that can operate in the downtown area to some number? Or will they pass ordinances restricting the number of occupants per 100 sq. ft. of office space? Or what about restricting businesses to a certain number of "car trips" per day?

The Council doesn't have the authority to actually prohibit businesses from operating hereat least not at the moment. It's conceivable that if California were to become more business unfriendly that changes to the State Constitution might be effected that would allow Cities more latitude in driving businesses out of their municipal jurisdictionsbut I suspect that such draconian changes to California's fundamental laws are not likely.

Sobefore people enthusiastically endorse this ideawhy not think about it for while, and try to come up with some evidence that the City actually needs a registry to solve the downtown parking problem, at least.

Posted by Douglas Moran
a resident of Barron Park
on Feb 22, 2014 at 1:32 pmDouglas Moran is a registered user.

In a previous consideration of a business registry (emphasizing not a license, not a tax), some of the data to be provided by the registry was number of employees, where those employees live (ZIP code granularity), how they commute, category of business (retail generates more trips from customers than employees; offices have little additional foot traffic; many categories in between).

The big employers (eg HP) supposedly already collect this information (for the County) but it wasn't being made available to the City (recollection was that there was some bureaucratic/legalistic reason). However, since they already collect the info, there is a negligible burden for them to give a report to the City (that earlier discussion included the goal of not requiring major changes in the collection/reporting).

For those who claim that this information is already available to the City, please explain. My knowledge of the information sources cited by the commenters making such claims is that they don't provide this.

Collect what information? Of course every employer knows how many employees they have. That information appears in every D&B report (Dunn and Bradstreet). Much of this sort of data is available on-line, for free, although it might not be helpful for large companies like HP that have offices all over the world.

As to this sort of data being provided to the County, but not the City-
1) Has the City asked HP for the data?
2) Has the City asked the County for the data?

So
1) Have both HP (and other large employers) refused to provided that data to the City?
2) Has the County refused to provide that data to the City?

It's really hard to believe that the headcounts of the larger employers have been kept secret from the City.

It might be interesting to know the zipcodes and the headcount from each zipcode. Has the City ever actually asked the local businesses for this information in any meaningful way?

There is little reason to believe that the larger employers would be unwilling to provide this information, if asked. Leaving us with the question about the impact of the smaller employers on traffic and parking demand.

Posted by JO
a resident of another community
on Feb 22, 2014 at 1:57 pm

I recall that voters defeated the last business registry proposal. City Hall overreached and tried to overburden everybody, even teenage babysitters. Be careful of what you wish for. Do you really trust this City government to come up with a solution that works?

Posted by Douglas Moran
a resident of Barron Park
on Feb 22, 2014 at 2:23 pmDouglas Moran is a registered user.

RE: Wayne Martin
Anyone with any experience with D&B knows it is highly unreliable for the purposes Wayne is claiming for it. Many smaller companies have no listing; many companies that no longer exist still have listings many years later; many companies have badly out-of-date information (such as not having their current addresses). D&B reports of employee counts for companies with multiple campuses are often unrelated to their physical location. And many secondary campuses and satellite offices (eg sales offices) are unlisted.

As to the rest of Wayne's questions, he should try reading for comprehension.

Posted by Wayne Martin
a resident of Fairmeadow
on Feb 22, 2014 at 3:11 pm

> D&B inaccurate ..

D&B was an example. There are many other sources of business information available to the public. Claims that every source of business information is inaccurate should be bolstered with some evidence.

But so what if the data obtained from a commercial source is inaccurate? So what if it is off 5-10 percent? Would the world stop? Would planning exercises be impossible? Don't think so.

And let's keep in mind that companies move everyday, and that a Business Registry would likely be updated by each business only once a year. It's really hard to believe that a 5%-10% error on a City run database is OK, but a similar error from a commercial database would not be OK.

A couple of years ago I came across a copy of the BID's membership and collection data (via a public information request). At that time, there were about 500 members on the list, although not all still were operating in Palo Alto (a little research determined).

The members were classified by the following business types:

Business Type: Retailers and Restaurants, Service Businesses, Professional Businesses, Lodging Business, Financial Institutions

Given this information, it would seem that a pretty good estimation of the headcounts of the BID members would easily be made. The underlying problem, however, as to how many vehicle trips a day these companies generate would still need some additional inputs.

Business Type------------------# Members
Retailers and Restaurants---------110
Service Businesses-----------------45
Professional Businesses-----------325
Lodging Business--------------------5
Financial Institutions-------------15
Total-----------------------------500

And as to this article's content .. anyone believing everything it has to say might entertain us by providing a list of previous articles from this source, or any other, that have come trueto the very word.

@An Insider: "In 2009, City Staff had 3 recent lists available to them, each comprehensive of the California Avenue business corridor, including contacts for condo and homeowner resident associations."

Between 2009 and 2012 those lists must have been lost. In May 2012 I asked for a list of businesses in the CA Ave. business district. Neither Tommy Fehrenbach or Shalha Yazdy could provide me with that information.

Yazdy wrote, "I unfortunately don't have a list of all businesses along California avenue. I can get you the mailing addresses of all the businesses along California Ave and surrounding streets, if this would help?"

What she sent me was a spreadsheet titled "CA Ave business assessment district mailing list" and appeared to be a list of property owners. The list did not include any business names and most of the owner/name fields simply say "Business Owner."

Re getting employee info from big companies:

I don't know what the legal issues are in obtaining info on where employees live and how they get to work. But according to the city's 2012-2013 Comprehensive Annual Financial Report at Web Link page 155, there are 40,203 employees working in the city, excluding city and school district workers.

There are only 9 major employers plus Stanford, and most of them probably already have the information. See Web Link and Web Link for some examples

I don't understand why the city has not asked the big businesses listed in the financial report how their employees get to work. Seems like that should be the first line of inquiry.

Posted by resident 1
a resident of Adobe-Meadow
on Feb 22, 2014 at 6:11 pm

Not sure how government agencies are being categorized:
1. Schools are businesses - they occupy property and require parking for the teachers and staff.
2. City, county, and state employees require parking. How much of the city property is owned by government agencies?
Other:
Loral - now SSL is a major business that provides parking for its employees - but probably many would use the shuttle as a lot live in PA.

Posted by Douglas Moran
a resident of Barron Park
on Feb 23, 2014 at 1:35 pmDouglas Moran is a registered user.

Re Wayne Martin: "It's really hard to believe that the headcounts of the larger employers have been kept secret from the City."

This is another example of the depth of Martin's ignorance on this issue. This was a major issue in the (failed) ballot measure for a business license tax. Many companies regard headcounts at various facilities as highly confidential information (because there is much that can be inferred from it). The business license tax proposal was structured in response to these concerns so that large businesses only had to report within a large window.

I support a business registry (not license, not tax) in principle and believe it is do-able, although I am skeptical that the City can produce a workable proposal -- the City's processes are so bad that I expect a repeated of the business license tax proposal where the City ignored the issues (and input) of the majority of businesses in Palo Alto (the proposal focused on big businesses, but covered everyone). BTW, I voted against that ballot measure

Posted by resident 1
a resident of Adobe-Meadow
on Feb 23, 2014 at 9:40 pm

Pat - great information. Note on figures above - not all of the employees are located in PA - they are paid out of HR located in PA. SSL has people located all over the world. SSL has many buildings located in Mountain View.
Figures above may not represent that all people are in PA.

The city, county, state, and federal government are employers, including the school system. I was surprised that many appear to be working in the Embarcadero bay area. I think we should know the numbers for these categories. They are represented by unions whereas many of the employers above are not union oriented. Does that make a difference? I think so - the number of government employees in all categories may collectively be the biggest group. If PA is dominated by public / government workers who are supported by unions then that tweaks the hiring process. That would tilt how a lot of decisions are made.

Posted by Insider
a resident of Evergreen Park
on Feb 25, 2014 at 3:56 pm

@Pat,
I learned the former Economic Development Manager, a woman that had been in that position for years named Susan, long before Tommy was hired, had a contact list for every business in the Calif. Avenue district.

She visited each store and gathered all the information herself, sharing it with CADA business leaders during the time the street design was being planned. The city should still have had her list when you asked them.

There was also a list of around 80 businesses contacted by the CADA group by email to tell them of meetings, and to give regular updates about the project. When the city needed information going to that district, they would ask for that list to be contacted, even Caltrain was helped by it, when the station was being renovated and condos were notified, thru business.

When when a CADA subcommitee began to design the street, they paid to have a new list, complete with all small offices identified. I was told that list was used to mail out the yearly dues and it was very complete.

It is not surprising the city told you they did not have anything. Reminds me of the trees being cut down with no warning from the city to anyone. No one knew anything back then! That is what first got my attention.

The city just likes to collect data. In this case, they want a new tax.

@Insider,
Yes, Susan Arpan used to work for the city as economic development manager. I spoke to her in October 2007, when she gave me pretty much the same info you provided: When she started her job, there was no list of business. She walked the downtown district and checked businesses against Reference USA. She was told there were 4,000 businesses in PA. Purchased Dun & Bradstreet, which showed 5500. Turns out there were 7- 8,000.

There used to be a Business Improvement District, which I think was just for the downtown area. An article in the PA Daily News in May 2007 quoted the executive director of the business improvement district, saying the group's greatest accomplishment was the completion of its Web site with a comprehensive database of all downtown businesses "that serves as a built-in resource for everyone."

Turns out that was just a list of business names, and then-city attorney Donald Larkin told me, "We do not have such a database."

In May 2012 I spoke to Fehrenbach, who told me they get lists of businesses by -- walking the districts. Nothing changes.

I asked about the DBA (doing business as) registry. He said it takes a big effort to get all the public records and put them together and they're hard to keep current. Lalo Perez did this during last discussion of a business license tax, but 6 months later lots had changed.

Fehrenbach admitted that the Excel spreadsheet I got, showing 350 mailing addresses of business owners, didn't include the names of the businesses in all cases.

As you point out, there's no organizational history at City Hall. If a fair business license tax would give the city complete and accurate info, it would be worthwhile.

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